Tesco (TSCO) H1 2026 earnings summary

Executive summary

• Group sales grew 5.1% year-over-year to £33,051m, with growth across all operating segments and continued market share gains, especially in the UK and Ireland.

• Adjusted operating profit increased 1.6% to £1,674m, supported by strong trading, cost control, and the Save to Invest program.

• Customer satisfaction and brand perception improved, with Net Promoter Score at a six-year high and Clubcard engagement at 85%.

• Investments in value, quality, and service drove volume growth and switching gains from competitors.

• Free cash flow reached £1,298m, up 2.9% year-over-year, and adjusted diluted EPS grew 6.8%.

Financial highlights

• Group sales for the half were £33.1 billion; UK and Ireland sales up 5.6%, Booker up 2.4%, Central Europe up 5%.

• Adjusted operating profit was £1,674m, up 1.6% year-over-year; UK and Ireland adjusted operating profit up 2.1% to £1,468m.

• Free cash flow was £1,298m; net debt at £9,884m, up £430m from year-end.

• Headline/adjusted EPS increased 6.8% to 15.43p; interim dividend proposed at 4.8p per share, up 12.9%.

• ROCE improved to 15.2% for H1 25/26.

Outlook and guidance

• Upgraded full-year 2025/2026 Group adjusted operating profit guidance to £2.9–£3.1 billion.

• Free cash flow expected within £1.4–£1.8 billion medium-term range.

• Full-year capital expenditure forecast at approximately £1.5bn.

• Competitive intensity expected to remain high in the second half, with continued focus on value, innovation, and digital.

• Progressive dividend policy and £1,450m share buyback program to be completed by April 2026.